I can't argue that fiction isn't fantasy but it is more than fantasy, or can be. I like the people in the books I read to seem real. I don't care if they are real. Actually I prefer that they aren't, for the most part. But I want them to seem like real people with the "powers" and vulnerabilities of real people and to deal with situations that seem real. I think my definition of "real" is that if I was there when they were there I might have to deal with the same situation. Fantasy can't do that, or at least it can't always do that.
I've never cared a lot about genre. I grew up before genre was a real part of publishing and writing. I spent a lot of time in book stores and libraries from the 1950's on and it wasn't till sometime in the 70s or maybe 80s, I don't remember exactly, that bookstores began to organize themselves into genres. Prior to that there was non-fiction, fiction and science fiction. Fiction included everything that wasn't science fiction, including fantasy. They were all arranged together alphabetically by author.
Some stores did have a separate section for westerns but even that was pretty unusual.
In those days novels were novels unless they were science fiction. That was considered disreputable and was usually in it's own section in the back of the store, often hidden behind a wall. I spent a lot of time there when I was young. People talked about me because I read SF.
Barry